Financial Crisis After Becoming a 1099

Last year was my first year working as a 1099 Independent Contractor. I did not know that normally your employer pays into your taxes. That number was totally out of my calculation when I tried projecting what would be owed for the next tax season. The amount that was actually owed was double what I calculated. Furthermore, my wife and I did not know that her employer was not taking any taxes out of her paychecks, so we got hit with that as well. When we filed our taxes, we ended up owing $18,344. I have worked towards paying off the debt.

Original Amount Owed for 2022: $18,344 ($14,893 Federal and $3,451 State)

Federal Paid To Date: $10,234 ($6,453 towards 2022 and $3,781 towards 2023)

State Paid To Date: $3,451

Total Paid to Date: $13,685

Remaining Federal Balance: $6,647.11

Remaining State Balance: $0.00

Projected Amount Owed for 2023: $13,758.03

Minus the Amount Paid toward 2023: $13,758.03 - $3,781 = $9,977.03

Total Possible Amount Remaining: $16,624.14

I started a new job in October 2023 with a W2 status, so I should not face such tax difficulty in the future. At my old job, I would see 39 people a week. During my first week at the new practice, I saw 2 clients. During my second week, I saw 4 clients. As this third week came to an end, I saw 11 clients. Next week has 5 sessions scheduled. These numbers are incredibly low compared to the normal number of sessions I have had over the past two years. Furthermore, it will take several weeks to actually get paid as it takes time for insurance companies to pay out for sessions that are billed.

I continue to need to pay for bills, the mortgage, and the student loan payments that restarted in October, in addition to the outstanding tax debt. I have added evening hours and Saturday hours to my new schedule in order to increase opportunities to have sessions and to build my caseload more quickly. I am in the process of requesting $300 from The Salvation Army. I have not heard back from other agencies where I reached out for support. I sought part-time work and have interviewed for two places that would provide minimum wage pay. I am going to look for part-time work that would provide higher compensation that matches my credentials and experience. Throughout this whole process, I am maintaining close contact with our church's Care Center. We have also made use of their food pantry.

As my finances dwindle, I am not sure what else to do. I am reaching out to those who might help us out of this financial crisis.

Thank you for your time,

-Colin Schofield